Bank rules change

Sunday, October 13, 2002Scott Welton

SIKESTON - By the end of this month, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 will have a direct effect on a lot more people.

Those who don't think Sept. 11, 2001, had any direct effect on their life will only need to open a bank account to prove themselves wrong.

The expansion of money laundering laws found in Title III, the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Subtitle A (International Counter Money Laundering and Related Measures), Section 326 deals with verification of identification.

The amendment mandates the Secretary of the Treasury to prescribe regulations setting minimum standards for verifying the identity of financial institutions' customers opening new accounts.

The act puts into place rules for verifying identities, maintaining records of verification information and consulting lists of known or suspected terrorist organizations.

Financial activities subject to the jurisdiction of the Commodity Futures Trading Commission are also subject to the new rules.

The purpose of the stricter identification procedures is so authorities can trace clients and "be assured of who the owners are," explained Rick Adams, president at First State Bank and Trust Company.

Banks must have their customer identification program in place by Oct. 25, according to Adams.

"Our bank has already implemented these procedures," Adams said. "We just feel it's our duty to go ahead and implement it and start gathering that data."

While a social security number or tax ID number has always been required, "Now we actually have to have a copy of their social security card," said Adams.

Banks will also now need to keep copies of photo identification on file.

Robin Pace, assistant vice president at U.S. Bank, said her bank has also already had policies in place that comply with the new rules. "I guess we were ahead of the ball game," she said.

The new rules apply to customers currently doing business with a financial institution as well as new customers, Adams noted.

Existing customers who are already doing business with a bank will be asked to supply the additional documentation if they add or modify their accounts or business relationship, including loan applications, safety deposit boxes, "any kind of account relationship," Adams said.

Personal accounts will require information on every account holder. For business accounts, information will be required for every person with authority to sign on the account.

"They've been surprised," said Adams of his customers' reactions, although they have also "been very receptive to this."

Adams said that because of the Sept. 11, 2001, terrorist attacks, people "realize the importance" and have "a heightened awareness" of security issues.

"We hope that it doesn't inconvenience our current customers but it's actually to their advantage and for their protection," said Pace.